08-3370 U.S. v. Sutton

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Sentencing
Number of victims

In a prosecution for health care fraud, where the defendant only defrauded the government, but not the individuals whose names he used to defraud the government, the individuals are not to be counted in determining the number of victims for sentencing purposes.

"The case cited by the government, United States v. Curran, 525 F.3d 74 (1st Cir. 2008), does not convince us otherwise. The defendant in Curran falsely presented himself as a medical doctor and then proceeded to diagnose patients with alarming illnesses that required expensive (and bogus) 'cures.' Curran, 525 F.3d at 77-78. The government contends that in treating all of the defendant's patients as victims, the First Circuit relied heavily on the fact that the defendant's charges for the tests and medications were 'inextricably linked to his misrepresentations, malpractice, and fear-mongering.' Id. at 81. It argues that by the same token, the funds Sutton received from the Medicaid programs were inextricably linked to the victimization of those individuals whose Medicaid numbers he used. But the analogy is unhelpful, because in Curran the victims paid for the bogus tests and medications, and therefore suffered precisely the sort of pecuniary harm envisioned under § 2B1.1. Because the guidelines are clear that monetary loss (or the intent of such loss) is required, and no such loss was suffered by the 2000-plus individuals whose identities were used by Sutton to perpetuate his fraud, the district court erred by imposing the six-level adjustment. Because there were in fact only two victims-Indiana Medicaid and Centers for Medicare and Medicaid Services-no additional upward victim adjustment was warranted. See U.S.S.G. § 2B1.1(b)(2); United States v. Icaza, 492 F.3d 967, 969-70 (8th Cir. 2007) (district court erred by treating many individual Walgreens stores as victims when all pecuniary harm could be traced to single parent corporation)."

Affirmed in part, and Vacated in part.

08-3370 U.S. v. Sutton

Appeal from the United States District Court for the Southern District of Indiana, McKinney, J., Rovner, J.

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